USD/JPY Could Drift Lower

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Updated: Aug 22, 2015, 09:00 GMT+00:00

On Monday, USD fell against JPY after US durable goods orders fell more than expected in July. Further, signals from the US about possible military action

On Monday, USD fell against JPY after US durable goods orders fell more than expected in July. Further, signals from the US about possible military action against Syria triggered risk-off trade and boosted demand for safe-haven currency JPY.
On Tuesday, jitters over Syria continued adding fuel to the overall strength for the Japanese Yen against other major currencies. USDJPY currency pair is currently hovering around the 98.00 level, managing to hold above 38.2% Fibonacci Retracement Level of 103.73 – 93.78 downfall.
As is visible on daily chart, USDJPY currency pair after testing the 100-day SMA and a descending trend-line resistance near 99.10 – 99.20, is moving back towards 38.2% retracement level support near 97.50 area.
Should the pair fail to hold 97.50 support zone, also coinciding with an ascending trend-line visible on daily chart, the pair is likely to continue the downfall towards 97.00 – 97.20 horizontal support zone, also marked by last week’s low
touched on Aug 20. Further on the downside, 200-day SMA, currently near 96.60 zone, seems to provide next strong support for the currency pair.
Should the pair now decisively break below 200-day SMA and fail to hold 23.6% retracement level intermediate support near 96.00 level, the pair seems vulnerable to test April 2013 level (sub 93.00) in the near-term.
On the upside, 98.20 – 98.40 zone seems to provide immediate resistance for the currency pair. This seems to be closely followed by a strong resistance near 98.70 – 98.90 zone, consisting of 50% retracement level, the ascending trend-line resistance and 100-day SMA.
Considering that the pair has repeatedly failed to strengthen above the ascending trend-line resistance, failure to hold the ascending trend-line support could easily trigger a renewed weakness for the currency pair towards 200-day SMA support.

USD/JPY Could Drift Lower

About the Author

Haresh Menghaniauthor

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